Colin James: Why the rubbish tax angst was avoidable

The council outrage over the sudden Solid Waste Levy hike could have been avoided and Colin James explains why.

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Councils across South Australia have every right to be angry with Treasurer Rob Lucas. Without warning, he has thrown their financial planning into chaos with his surprise decision to increase a rubbish tax by 40 per cent.

The hike in the Solid Waste Levy, charged on every tonne of rubbish dumped at landfills, will cost ratepayers millions of dollars that were not factored into budgets sent out by the state’s 67 councils for public feedback.

Under the Local Government Act, councils must consult their communities on their draft annual business plans. No such consultation is legally required by the State Government when it is deciding its spending priorities.

Instead, Mr Lucas blindsided councils last week when he used the State Budget to announce the waste levy would increase by $10 to $110 next week, and then by a further $30 to $140 next January.

STINKING: Salisbury and Playford councillors are unhappy with the rubbish tax increase.

Mayors were in Canberra attending a national local government conference last Tuesday when they learnt about the increase – just when they were planning to return to Adelaide to chair meetings where their budgets, and rate increases, were set to be approved.

They were furious with Mr Lucas for not warning them, through the Local Government Association, that he was planning to hit them with such a big increase of one of their biggest bills behind wages and electricity costs.

He has argued he does not consult with anyone when deciding on his Budget but his explanation has fallen on deaf ears. Many mayors believe councils are the victims of a payback for their opposition to the introduction of rate-capping, another assertion rejected by Mr Lucas. He told a lunch last Thursday thatr he does not make his Budget decisions based on paybacks.

His explanation for increasing the levy was it would “incentivise” councils to do more to reduce the amount of waste going to landfills. He also said the extra money from the levy would be spent on initiatives to encourage more recycling while also funding essential coastal-protection work to save West Beach and Henley Beach from sand erosion.

The argument has not been accepted by councils, particularly in country areas.

They want the money to be spent supporting them on coping with the aftermath of the China Sword recycling crisis, which already has added millions to the cost of processing waste from their communities.

The increased bills for recycling onshore – rather than earning money by sending paper, cardboard, plastic and glass overseas – had already affected council budgets before Mr Lucas hiked the Solid Waste Levy.

Councils had factored in a small increase in the levy into the budgets, with most expecting it to rise by $100-$103 a tonne.

None were expecting it to hit $140 a tonne halfway through the next financial year and into the future.

The impact is significant and relative to each council’s geographical size, population and rate income. While some country councils such as Mid-Murray and Kimba are suddenly having to find an extra $40,000-$80,000, their larger city counterparts are being hit with unexpected costs of up to $800,000.

Salisbury Council, for example, will pay $2.1 million more to dump rubbish across the next two years than they had planned – and a total of $5 million more across the next five years if the levy keeps increasing annually at the rate of the Consumer Price Index.

Councillors have reluctantly voted to increase their rates by 2.9 per cent, rather than a planned 2.5 per cent, while also deciding to put pamphlets in rate notices blaming the Government.

Three other metropolitan councils have also raised their rates. Others are set to follow suit, not only across Adelaide but the state. Elected members are loudly voicing their displeasure with Mr Lucas – and hoping ratepayers will understand their predicament.

The collective view among many mayors is that much of the angst could have been avoided if he had called LGA president Sam Telfer, who wants to be a Liberal MP, and given him the heads-up.

COLIN JAMES IS CHIEF REPORTER OF MESSENGER NEWS